US electric vehicle manufacturer Tesla (NASDAQ:TSLA) Inc. reduced the price of Tesla Model 3 and Model Y electric cars in China by more than 10% from January 6, 2023 amid increased competition in the world’s largest electric vehicle market.

Tesla cut the starting price for the rear-wheel drive Tesla Model 3 to 229.9 thousand yuan ($33.407 thousand) from 265.9 thousand yuan. The Model Y’s starting price is now 259,900 yuan, up from 288,900 yuan before the cut, the company said in a statement on its website.

At the same time, Tesla already lowered the price of electric vehicles in China in October 2022 to protect itself from growing competition from fast-growing Chinese electric car manufacturers, as well as conventional car manufacturers increasing their presence in the country, MarketWatch writes.

As reported earlier this week, in the fourth quarter, Tesla produced more than 439,000 electric vehicles and delivered more than 405,000. The figures were a record, but fell below analysts’ expectations, due to weakening demand, problems with logistics, rising interest rates and fears of a recession.

Meanwhile, shipments from Tesla’s Shanghai plant in December 2022 plummeted 44% from the previous month, data from the China Passenger Car Association (CPCA) showed. In December, the company shipped 55,796 vehicles, which is the minimum figure for five months. In November, deliveries amounted to 100.291 thousand. Compared to December 2021, the indicator for the last month of 2022 decreased by 21%.